Minnetonka firm argues against contraceptive coverage mandate

Citing religious objections, two companies on Wednesday took their opposition to the federal health law's requirement for contraceptive coverage to an appeals court in St. Paul.

The requirement on group health insurance plans is part of the federal Affordable Care Act, which was passed in 2010, and the government has issued related regulations that effectively exempt certain religious employers.

But the opt-outs don't apply to Annex Medical Inc. of Minnetonka and a Missouri company called O'Brien Industrial Holdings -- for-profit businesses that presented arguments Wednesday before the 8th U.S. Circuit Court of Appeals. The government's mandate exemptions apply to nonprofit groups.

The lawsuits are two of more than 70 cases that have been filed by employers across the country in opposition to the mandate. Three different federal courts of appeal already have weighed in on the question -- two have sided with the government, while one found in favor of Oklahoma City-based arts and crafts retailer Hobby Lobby, which opposes the mandate.

The split decisions mean there's a good chance that before the three-judge panel that met Wednesday in St. Paul offers a ruling, the U.S. Supreme Court will take up the issue, said Erick Kaardal, a Minneapolis attorney representing Annex Medical.

"It might sit in its present posture until the U.S. Supreme Court accepts the petitions before it and decides the merits of those petitions," Kaardal said.

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"That could take about 15 months."

In a November 2012 lawsuit, Annex Medical argued that the health law's mandate for coverage of preventive health services, including contraceptives, would force the Minnetonka company either to drop employee health insurance or to violate its religious beliefs.

The Missouri company argued that the health law wrongfully forces a choice between paying a penalty and violating the firm's religious beliefs. O'Brien Industrial Holdings is larger than Annex Medical, so the firm will be subject to the health law's mandate for large employers to offer coverage.

Both companies lost in lower court rulings, where judges found that requiring contraceptive coverage does not constitute a substantial burden on a plaintiff's religious exercise. Government attorneys argued that plaintiffs are wrongly trying to extend the religious beliefs of individual company owners to corporations that don't engage in the exercise of religion as defined by federal law.

"The personal religious beliefs of ... plaintiff Frank O'Brien, cannot provide a basis for the (company) plan to deny federally required benefits," government attorneys wrote in a brief filed with the court of appeals. "The obligation to cover contraceptive services lies with the (company) plan which, like (the company) itself, is a legal entity separate and distinct from Mr. O'Brien."

Kaardal, the Minneapolis attorney, said in an interview that lawsuits brought by his client and others are not trying to overturn the Affordable Care Act. Instead, they are trying to create a way for companies with a faith-based charter to offer health plans in compliance with all other aspects of the law, Kaardal said.

In a filing with the appeals court, Kaardal stressed the religious convictions of Stuart Lind, the owner of Annex Medical.

"When Lind's businesses engage in or cooperate with activity that violates Catholic teaching, Lind believes it is a violation of his own religious beliefs," Kaardal wrote. "Consequently, when Lind's businesses have engaged in or cooperated with activities that violate Catholic teaching on the sanctity of life, he has attempted, where possible, to cause them to cease such activity or cooperation with the same."

At the conclusion of Wednesday's hearing, the three judges on the panel said they would take the case under advisement.